`SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2001

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from______to______

                          Commission File Number: 3699

--------------------------------------------------------------------------------

                           Island Critical Care Corp.
        (Exact Name of Small Business Issuer as Specified in its Charter)
--------------------------------------------------------------------------------

                     Delaware                           65-0967706
       (State or Other Jurisdiction of               (I.R.S. Employer
         Incorporation or Organization)              Identification No.)

               9 Myrtle Street, Stratford, PE, Canada       C1A 1P4
             (Address of Principal Executive Offices)     (Zip code)

      Issuer's Telephone Number, Including Area Code: (902) 569-4447

Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report:

Check whether the issuer (1) filed all reports required to be filed by section
13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12 months
(or for such shorter period that the registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days.  Yes [X]    No [  ]

As of August 15, 2001 the Issuer had 18,151,000 shares of Common Stock, par
value of $.001outstanding.

Transitional Small Business Disclosure Format (check one):  YES    NO X



                           ISLAND CRITICAL CARE CORP.
                                   FORM 10-QSB
                       For the Quarter Ended June 30, 2001

                                      INDEX
                                                                        Page No.
                                                                        --------
PART I.  FINANCIAL INFORMATION

Item 1.    Financial Statements

           Independent Accountants' Report on Interim
           Financial Information

           Balance Sheets at June 30, 2001 (Unaudited) and
           March 31, 2001

           Statements of Changes in Stockholders' Equity (Deficit)
           for the Three Months Ended June 30, 2001 and 2000
           (Unaudited) and March 31, 2001 and 2000

           Statements of Operations and Comprehensive Income for
           The Three Months Ended June 30, 2001 and 2000 (Unaudited)

           Statements of Cash Flow for the three months ended
           June 30, 2001 and 2000 (Unaudited)

           Notes to the Financial Statements (Unaudited)

Item 2.    Management's Discussion and Analysis or Plan of Operations

PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings
Item 2.    Changes in Securities
Item 3.    Defaults Upon Senior Securities
Item 4.    Submission of Matters to a Vote of Security Holders
Item 5.    Other Information
Item 6.    Exhibits and Reports on Form 8-K

SIGNATURES





                           ISLAND CRITICAL CARE CORP.
                            (A DELAWARE CORPORATION)
                               Palm Beach, Florida

             -------- -------------------------------------- ------
                                FINANCIAL REPORTS
                                       AT
                                  JUNE 30, 2001
             -------- -------------------------------------- ------


                                      F - 1







ISLAND CRITICAL CARE CORP.
(A DELAWARE CORPORATION)
Palm Beach, Florida


TABLE OF CONTENTS
--------------------------------------------------------------------------------


Independent Accountants' Report on Interim Financial Information                F - 2

Balance Sheets at June 30, 2001 (Unaudited) and March 31, 2001                  F - 3

Statements of Changes in Stockholders' Equity (Deficit) for the Three Months
  Ended June 30, 2001 and 2000 (Unaudited) and March 31, 2001 and 2000          F - 4

Statements of Operations and Comprehensive Income for the Three Months
  Ended June 30, 2001 and 2000 (Unaudited)                                      F - 5

Statements of Cash Flows for the Three Months Ended June 30, 2001
  and 2000 (Unaudited)                                                          F - 6 to F - 7

Notes to the Financial Statements (Unaudited)                                   F - 8 to F -11



                                      F - 2




                        INDEPENDENT ACCOUNTANTS' REPORT


To the Board of Directors
Island Critical Care Corp.
(A Delaware Corporation)
Palm Beach, Florida


        We have reviewed the accompanying balance sheet of Island Critical Care
Corp. as of June 30, 2001, and the related statements of operations and
comprehensive income for the three months ended June 30, 2001 and 2000, and the
related statements of changes in stockholders' equity and cash flows for the
three months ended June 30, 2001 and 2000. These financial statements are the
responsibility of the management of Island Critical Care Corp.

        We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
the financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

        Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to be
in conformity with accounting principles generally accepted in the United States
of America.

        We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the balance sheet as of
March 31, 2001 (presented herein), and the related statements of operations,
changes in stockholders' equity and cash flows for the year ended March 31, 2001
(not presented herein) and for the periods from date of inception (April 21,
1998) through March 31, 2001, and in our report dated May 9, 2001, we expressed
an unqualified opinion on those financial statements. We have not performed any
auditing procedures subsequent to the date of our report.


/s/ Rotenberg & Company, LLP
    Rochester, New York
    August 1, 2001


    The accompanying notes are an integral part of this financial statement.

                         See Accountants' Review Report

                                      F - 3







ISLAND CRITICAL CARE CORP.
(A DELAWARE CORPORATION)
Palm Beach, Florida


BALANCE SHEETS
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

                                                               (In U.S. Dollars)
                                                        (Unaudited)
                                                          June 30,      March 31,
                                                            2001           2000
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

ASSETS

Current Assets
Cash and Cash Equivalents                              $  1,884        $  27,523
Accounts Receivable                                      17,235            1,281
Commodity Tax Recoverable                                 7,174            8,673
Inventories                                             745,759          672,614
Prepaid Expenses                                         22,721           21,097
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Total Current Assets                                    794,773          731,188

Property and Equipment - Net of Accumulated
   Depreciation                                         134,823          118,925

Other Assets
License Fee - Net of Accumulated Amortization            18,628           18,724
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Total Assets                                           $948,224        $ 868,837
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
Line of Credit                                      $ 1,040,603        $ 951,900
Grants Payable - Due Within One Year                     23,785              --
Note Payable - Due Within One Year                       36,507           45,710
Accounts Payable                                        397,687          273,874
Accrued Expenses                                         96,118           57,961
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Total Current Liabilities                             1,594,700        1,329,445

Other Liabilities
Grants Payable                                          104,781          104,623
Note Payable - Due After One Year                       141,217          133,279
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Total Liabilities                                     1,840,698        1,567,347
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Stockholders' Equity (Deficit)
Common Stock - $.001 Par; 50,000,000 Authorized;
               18,151,000 Issued and Outstanding         18,151           18,101
Additional Paid-In Capital                              911,718          885,639
Retained Deficit
                                                     (1,809,608)      (1,621,359)
Accumulated Other Comprehensive Income (Loss)
                                                        (12,735)          19,109
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Total Stockholders' Equity (Deficit)
                                                       (892,474)        (698,510)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Total Liabilities and Stockholders' Equity (Deficit)  $ 948,224        $ 868,837
---------------------------------------------------------------------------------


    The accompanying notes are an integral part of this financial statement.

                         See Accountants' Review Report

                                      F - 4






ISLAND CRITICAL CARE CORP.
(A DELAWARE CORPORATION)
Palm Beach, Florida


STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                                               (In U.S. Dollars)

                                                                           Common
                                                                Stock    Additional
                                                 Number of    $.001 Par    Paid-In
                                                  Shares        Value      Capital
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------

Balance - March 31, 2000                        18,101,000    $ 18,101   $ 701,719

Exercise of Stock Options                               -           -       50,580
Net Loss for the Period                                 -           -           -
Other Comprehensive Income (Loss) for the Period        -           -           -
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------

Balance - June 30, 2000                         18,101,000      18,101     752,299

Contribution of Capital                                 -           -      133,340
Net Loss for the Period                                 -           -           -
Other Comprehensive Income (Loss) for the Period        -           -           -
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------

Balance - March 31, 2001                        18,101,000      18,101     885,639

Contribution of Capital                                 -           -       19,522
Exercise of Stock Options                           50,000          50       6,557
Net Loss for the Period                                 -            -          -
Other Comprehensive Income (Loss) for the Period        -            -          -
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------

Balance - June 30, 2001 (UNAUDITED)             18,151,000    $ 18,151   $ 911,718
------------------------------------------------------------------------------------



-Continued-

                       Accumulated           Total
                          Other          Stockholders'
    Retained          Comprehensive          Equity
     Deficit          Income (Loss)        (Deficit)
---------------------------------------------------------
---------------------------------------------------------


 $   (435,828)        $  (4,896)            $ 279,096


           -                 -                 50,580

     (312,818)               -               (312,818)

           -             (5,714)               (5,714)
---------------------------------------------------------
---------------------------------------------------------


    (748,646)           (10,610)               11,144


          -                  -                133,340

    (872,713)                -               (872,713)

          -              29,719                29,719
---------------------------------------------------------
---------------------------------------------------------


  (1,621,359)            19,109              (698,510)


          -                  -                 19,522

          -                  -                  6,607

    (188,249)                -               (188,249)

          -             (31,844)              (31,844)
---------------------------------------------------------
---------------------------------------------------------


 $(1,809,608)          $(12,735)            $(892,474)
---------------------------------------------------------


    The accompanying notes are an integral part of this financial statement.

                         See Accountants' Review Report

                                      F - 5




ISLAND CRITICAL CARE CORP.
(A DELAWARE CORPORATION)
Palm Beach, Florida


STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                                     Three Months Ended June 30,
                                                    ----------------------------
                                                    ----------------------------
                                                      2001                2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Sales                                              $  16,167           $    --

Cost of Sales                                         13,382                --
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Gross Profit                                           2,785                --
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Operating Expenses
Advertising and Promotion                               394               4,273
Professional Fees                                     6,878              27,667
Office Expense                                        6,165               5,632
Relocation Expense                                       --              31,093
Rent and Utilities                                   13,498                 926
Research and Development Costs                        6,141             155,855
Salaries and Benefits                               117,575              98,364
Telephone                                             3,669               3,506
Travel, Trade Shows and Conferences                  18,506              10,332
Depreciation and Amortization                         5,651               1,820
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Total Operating Expenses                            178,477             339,468
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


Loss Before Other Income (Expenses)                (175,692)           (339,468)

Other Income (Expenses)
Government Grants                                    14,535              26,650

Interest                                            (27,092)                 --
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


Net Loss for the Period                            (188,249)           (312,818)

Other Comprehensive Income (Loss)

Foreign Currency Translation Adjustment             (31,844)             (5,714)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Comprehensive Income (Loss)                      $ (220,093)         $ (318,532)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Weighted Average of Common Shares Outstanding    18,117,667          15,522,395


Net Loss per Common Share - Basic and Diluted    $   (0.01)          $    (0.02)
--------------------------------------------------------------------------------


    The accompanying notes are an integral part of this financial statement.

                         See Accountants' Review Report

                                      F - 6








ISLAND CRITICAL CARE CORP.
(A DELAWARE CORPORATION)
Palm Beach, Florida


STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                                     Three Months Ended June 30,
                                                     ---------------------------
                                                     ---------------------------
                                                      2001                2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Cash Flows from Operating Activities
Cash Received from Customers                       $ 16,167               $  --
Cash Received from Government                        14,535                  --

Cash Paid to Suppliers and Employees              (125,769)            (291,177)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


Net Cash Flows from Operating Activities           (95,067)            (291,177)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Cash Flows from Investing Activities

Purchase of Property and Equipment                 (15,650)              (3,118)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


Net Cash Flows from Investing Activities           (15,650)              (3,118)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Cash Flows from Financing Activities
Gross Proceeds From Stock                            6,607                50,783
Capital Contribution                                19,522                19,498
Net Proceeds from Borrowings                        59,312                    -
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Net Cash Flows from Financing Activities            85,441                70,281
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Effect of Exchange Rate Changes

  on Cash and Cash Equivalents                       (363)               (5,336)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


Net Increase (Decrease) in Cash and
   Cash Equivalents                               (25,639)             (229,350)

Cash and Cash Equivalents - Beginning of Period    27,523                246,814
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Cash and Cash Equivalents - End of Period         $ 1,884               $ 17,464
--------------------------------------------------------------------------------



    The accompanying notes are an integral part of this financial statement.

                         See Accountants' Review Report

                                      F - 7







ISLAND CRITICAL CARE CORP.
(A DELAWARE CORPORATION)
Palm Beach, Florida


RECONCILIATION OF NET LOSS TO NET CASH FLOWS FROM OPERATING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                                     Three Months Ended June 30,
                                                     ---------------------------
                                                     ---------------------------
                                                      2001                 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


Net Loss for the Period                            $(188,249)         $(312,818)

Adjustments:

Depreciation and Amortization                          5,651              1,820

Changes in Assets and Liabilities:

Accounts Receivable                                 (14,932)            (47,851)

Commodity Tax Recoverable                             1,623              (9,149)

Inventory                                           (44,759)            (63,021)

Prepaid Expenses                                       (647)            (11,958)

Accounts Payable                                    110,773             107,325

Accrued Expenses                                     35,473              44,475
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------




                                      F - 8





ISLAND CRITICAL CARE CORP.
(A DELAWARE CORPORATION)
Palm Beach, Florida


NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

Note A -   Basis of Presentation
        The condensed financial statements of Island Critical Care Corp. (the
        "Company") included herein have been prepared by the Company, without
        audit, pursuant to the rules and regulations of the Securities and
        Exchange Commission (the "SEC"). Certain information and footnote
        disclosures normally included in financial statements prepared in
        conjunction with generally accepted accounting principles have been
        condensed or omitted pursuant to such rules and regulations, although
        the Company believes that the disclosures are adequate to make the
        information presented not misleading. These condensed financial
        statements should be read in conjunction with the annual audited
        financial statements and the notes thereto included in the Company's
        Form 10SB, and other reports filed with the SEC.

        The accompanying unaudited interim financial statements reflect all
        adjustments of a normal and recurring nature, which are, in the opinion
        of management, necessary to present fairly the financial position,
        results of operations and cash flows of the Company for the interim
        periods presented. The results of operations for these periods are not
        necessarily comparable to, or indicative of, results of any other
        interim period of or for the fiscal year taken as a whole. Factors that
        affect the comparability of financial data from year to year and for
        comparable interim periods include non-recurring expenses associated
        with the company's registration with the Securities and Exchange
        Commission and costs incurred to raise capital. Certain financial
        information that is not required for interim financial reporting
        purposes has been omitted.

Note B -   Other Matters
           Grants
        The Company has received grants from the National Research Council of
        Canada. The grants are non-repayable and are based upon 40% of qualified
        research and development expenditures up to a maximum of $48,000
        Canadian (approximately $32,000 U.S. at June 30, 2001). Grants received
        are recognized as Other Income in the period in which the related
        expenses are incurred. No grants were received during the quarter ended
        June 30, 2001.

        The Company has received grants from Human Resource Development Canada
        (HRDC). The grants are non-repayable and cover 50% of each qualified
        employees' salary for a period of six months. The grants also include
        amounts to be used for workstations for assemblers up to a maximum
        amount of $70,000 Canadian (approximately $46,250 U.S. at June 30,
        2001). Grants received are recognized as other income in the period in
        which the related expenses are incurred. Grant revenue amounted to
        $14,535 U.S. at June 30, 2001. Amounts receivable under the grant
        amounted to $15,914 U.S. at June 30, 2001 or 2000.

        The Company has received grants from the Prince Edward Island Business
        Development Agency. The grants are non-repayable and are based upon 40%
        of the qualified marketing expenditures up to a maximum of $13,352 U.S.
        Grants received are recognized as Other Income in the period in which
        the related expenditures are incurred. There was no grant revenue during
        the quarter ended June 30, 2001.

        The Company is entitled to receive grants in the form of interest free
        loans from the Atlantic Canada Opportunities Agency, an agency of the
        Canadian Government. The total amount of the loans available is
        approximately $244,900 U.S. and is based upon Qualified Expenditures for
        Capital Asset Acquisitions, Market Development and Standard
        Certification Costs. The grant is interest free and is repayable over 5
        years commencing in January, 2002. Amounts outstanding under the grants
        amounted to $128,566 at June 30, 2001.

                                                                  - continued -


                                      F - 9




ISLAND CRITICAL CARE CORP.
(A DELAWARE CORPORATION)
Palm Beach, Florida

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

Note B -   Other Matters - continued

           Inventories

        Inventories consist of parts to be used in the assembly of the pulse
        oximeter and finished goods. Inventories are recorded at the lower of
        cost determined by the first in, first out method or market.

           Lines of Credit
        The Company has available a line of credit with the Prince Edward Island
        Lending Agency, an agency of the Province of Prince Edward Island
        Government with a maximum amount of $991,050 U.S. The line of credit
        became available upon the completion of the prototype for the Pulse
        Oximeter, and is collateralized by the general assets of the company.
        The company also has available an additional line of credit with the
        Prince Edward Island Lending Agency to cover qualified expenditures only
        with a maximum amount of $132,140 U.S. The additional line of credit
        available with a maximum amount of $132,140 U.S. is personally
        guaranteed by three directors of the company. The lines of credit bear
        interest at the prime rate plus 3% (9.25% at June 30, 2001) annually.
        The total amount outstanding was $1,040,603 U.S. at June 30, 2001.
        Interest expense for the lines of credit amounted to $23,037 and $-0-
        for the three months ended June 30, 2001 and 2000, respectively.

           Notes Payable
           Notes payable consisted of the following:

           ----------------------------------- ------------- -------------
           June 30,                                 2001          2000
           ----------------------------------- ------------- -------------
           ----------------------------------- ------------- -------------

           Note payable, unsecured, repayable
           in monthly installments of $2,422,
           including principal and interest.
           The note is for a five-year term
           and bears interest at the rate of 9%
           per annum. The note is due in July
           2005.                                 $   98,113       $ --


           Note payable, unsecured, repayable
           in monthly installments of $1,176,
           including principal and interest.
           The note is for a five-year term and
           bears interest at the rate of 9% per
           annum. The note is due in September
           2005.                                     49,254        --

           Note payable, unsecured, repayable
           in monthly installments of $692,
           including principal and interest.
           The note is for a five-year term and
           bears interest at the rate of 9% per
           annum. The note is due in December
           2005.                                     30,357
           ----------------------------------- ------------- -------------
                                                  $ 177,724       $--
           Less: Amount due within one year          36,057        --
           ----------------------------------- ------------- -------------
           ----------------------------------- ------------- -------------

           Amount Due After One Year              $ 141,667       $--
           ----------------------------------- ------------- -------------

           Annual maturities of debt for the five years succeeding June 30, 2001
           are as follows:

              2002           2003          2004        2005       2006      Total
           ------------ ------------- ------------ ----------- ---------- -----------
           ------------ ------------- ------------ ----------- ---------- -----------
             $ 36,057      $ 39,930      $ 43,676   $ 47,774    $ 10,287   $ 177,724
           ------------ ------------- ------------ ----------- ---------- -----------

           Interest expense for the three months ended June 30, 2001 and 2000
           amounted to $4,055 and $-0-, respectively.


                                                                   - continued -


                                                           F - 10




ISLAND CRITICAL CARE CORP.
(A DELAWARE CORPORATION)
Palm Beach, Florida

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

Note B -   Other Matters - continued

           Stock Options and Warrants
           Investors
        In November 1999, the Company granted 747,025 warrants to investors in
        connection with the original issuance of shares. The warrants are
        exercisable over a 24-month term at an exercisable price of $1.00 and
        $1.50 per share in the first and second year respectively ($.68 and
        $1.02 in U.S. Dollars). The fair market value of the options was
        determined by using a Black Scholes option-pricing model. The calculated
        fair value at the date of the grant was zero.

           Directors
        In January 2000, the Company began granting options to certain directors
        in increments of 1,000 per month (51,000 outstanding at June 30, 2001).
        The stock options are exercisable at $.25 per share ($.17 per share
        U.S.). All options are fully vested and expire three years from the date
        of the grant. The fair market value of the options was determined using
        the Black Scholes option-pricing model. The calculated fair value at the
        date of the grant was zero.

           Employee
        In July 2000, the Company began granting options to employees. These
        options vest over a three-year period and are exercisable at $2.00 U.S.
        per share. The options expire three years from the date of the grant.
        The fair market value of the options was determined using the Black
        Scholes option-pricing model. The calculated fair value at the date of
        the grant was zero.

           The assumptions used were as follows:
           --------------------------------------------- -----------------------
           Weighted Average Fair Value of Common Stock       $ .34
           Expected Market Volatility                         10.0%
           Risk Free Interest Rate                            5.50%
           Terms                                                24 Months
           --------------------------------------------- -----------------------

           Information with respect to all stock options is as follows:
           --------------------------------------------- -----------------------
           Outstanding at March 31, 2000                 1,051,835
           Granted to Investors                                --
           Granted to Directors                                --
           Granted to Employee                              50,000
           --------------------------------------------- -----------------------
           --------------------------------------------- -----------------------
           Outstanding at June 30, 2000                  1,101,835
           Granted to Investors                                --
           Granted to Directors                             36,000
           Granted to Employee                              25,000
           --------------------------------------------- -----------------------
           --------------------------------------------- -----------------------
           Outstanding at March 31, 2001                 1,162,835
           Granted to Investors                                --
           Granted to Directors                              9,000
           Granted to Employee                                 --
           Exercised
                                                          (50,000)
           --------------------------------------------- -----------------------
           --------------------------------------------- -----------------------
           Outstanding at June 30, 2001                  1,121,835
           --------------------------------------------- -----------------------

           The weighted average value of the common stock used was the last
           stock-offering price since the company has no  established market for
           its shares.


                                                                   - continued -


                                     F - 11





ISLAND CRITICAL CARE CORP.
(A DELAWARE CORPORATION)
Palm Beach, Florida


NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

Note B -   Other Matters - continued

           Development Stage
        The company was formed on April 21, 1998 and was in the development
        stage through March 31, 2001. During the quarter ending June 30, 2001,
        the company accumulated finished goods inventory and recorded revenue
        from the sale of its product. In addition, the company is projecting
        significant revenue for the year ending March 31, 2002. These factors
        indicate that the company is no longer in the development stage, and has
        now been presented as an operating company.


Item 2.    Management's Discussion and Analysis or Plan of Operations

Forward Looking Statements

        All statements, other than statements of historical fact, which address
activities, actions, goals, prospectus, or new developments that Island Critical
Care Corp. expects or anticipates will or may occur in the future, including
such things as expansion and growth of its operations and other such matters are
forward-looking statements. Any one or a combination of factors could materially
affect Island Critical Care Corp.'s operations and financial condition. These
factors include competitive pressures, success or failure of marketing programs,
changes in pricing and availability of products and conditions in the capital
markets. Forward-looking statements made by Island Critical Care Corp. are based
on knowledge of its business and the environment in which it operates as of the
date of this report. Because of factors listed below, as well as other factors
beyond its control, actual results may differ from those in the forward-looking
statements.

Plan of Operations

        At the present time Island Critical Care Corp. has developed its first
product, the VitalSAT Pulse Oximeter. We have commenced the sale of this product
and have operated at a loss since our inception.

        Our first product is a state-of-the-art stand-alone pulse oximeter,
which uses Masimo Corporation's Signal Extraction Technology. We have undergone
and continue to undergo a testing and certification process on the unit, which
will allow the unit to be sold in our target markets. To date, the product has
been certified or approved under the standards of Health Canada's Therapeutic
Product Programme, Canadian Standards Association (CSA), Certifications Europe
(CE) and Underwriters Laboratories (UL). We have applied to have pre-market
approval under the Food, Drug and Cosmetics Act (FDA) in the United States and
expect to have this completed in mid-September 2001. There is no certainty that
we will be successful in obtaining the required certifications. If we are not
able to obtain these certifications, the market for our product will be limited.

        The operations of the Company from its inception in April 1998 to
present, have been funded by a private placement in November 1999, line of
credit facility from PEI Lending Agency (an agency of the Provincial Government
of the Province of Prince Edward Island, Canada), repayable grants from the
Atlantic Canada Opportunities Agency (an agency of the Federal Government of
Canada), non-repayable grants from PEI Business Development (an agency of the
Provincial Government of the Province of Prince Edward Island, Canada) from the
National Research Council of Canada and Human Resources Development Canada (both
departments of the Federal Government of Canada).

Our operations over the next twelve months include the following:

        -   Obtaining approval under the Food, Drug and Cosmetics Administration
            (FDA 510K),
        -   Continuing the expansion our distribution channel for the sale of
            the product and future products,
        -   Refining the production facility in Prince Edward Island, and;
        -   Hiring of staff to produce the product.

        The company is currently focusing its efforts in the expansion of it
distribution network. We have signed seven (7) distributors, giving our product
representation in fifteen (15) countries around the world. We are currently in
different levels of discussion with fifty-six (56) companies for representation
of our product in their geographical area. Product sales to June 30, 2001
represent the initial purchase requirements of each distributor on the signing
of their contracts.


Results of operations: First quarter and first three months of fiscal 2001
compared to the first quarter and first three months of fiscal 2000

        The comprehensive loss for the three-month period ended June 30, 2001
amounted to $220,093 or $0.01 per share on a basic and diluted basis, as
compared to $318,532 or $0.02 per share on a basic and diluted basis for the
three month period ended June 30, 2000.

        For the three-month period ended June 30, 2000, the Company was engaged
in the development of the pulse oximeter, undergoing a certification process for
commercial sale of the product, and began developing a distribution network for
the sale of its product.

        In addition, the Company was actively involved with the registration of
its securities in a SB-2 filing with the Securities and Exchange Commission,
which resulted in the Commission deeming the Company "effective" on January 18,
2001.

        The Company expended $155,855 on research and development of its pulse
oximeter for the three-month period ended June 30, 2000. These costs include
sub-contract engineering, prototype related costs and certification and
electrical standards testing of the pulse oximeter. As a result of completing
the development and most of the certifications in the prior quarters, these
costs are significantly reduced in the quarter ended June 30, 2001 ($6,141).

        Sales and Marketing costs, disclosed in the financial statements under
the heading of Advertising and Promotion and Travel, trade shows and conferences
relate to the costs of attendance at tradeshows, meetings with potential
distributors and the design for both three-month periods ending June 30, 2001
and 2000.

        The major components of General and Administrative expenses include
Investor Relations, Legal and Accounting, Relocation Expenses and Salaries and
Benefits. Investor Relations includes a monthly contract with Finlay
International who provides all investor relations services on behalf of the
Company at a monthly cost of $2000 plus related expenses, share transfer agent
costs and ongoing filing costs with the Securities and Exchange Commission.
Legal and Accounting costs are principally comprised of costs associated with
the Company's accountants for the audit and quarterly reviews of the Company's
financial statements for filing with the Securities and Exchange Commission and
legal fees for the ongoing registration of the Company's trademarks and general
corporate matters.


PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings

     There are no legal proceeding to report.

Item 2.  Changes in Securities and use of Proceeds

     Not Applicable.

Item 3.  Defaults upon Senior Securities

     Not Applicable.

Item 4.     Submission of Matters to a Vote of Security Holders

     Not Applicable

Item 5.  Other Information

     Not Applicable

Item 6.     Exhibits and Reports on Form 8-K

     (a) Exhibits.   None.
     (b) Reports on Form 8-K.  None.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.

Island Critical Care Corp.

Date:   August 14, 2001             /s/ Wayne Weber

                                        Wayne Weber
                                        Vice President of Finance and
                                        Chief Financial Officer
                                        (As principle accounting and financial
                                        officer and on behalf of the Registrant)

Date:   August 14, 2001             /s/ Sean Flanigan

                                        Sean Flanigan
                                        Vice President of Operations and
                                        Chief Operations Officer
                                        (As principle operating officer
                                        and on behalf of the Registrant`